People wait in line for the Cleveland Career Fair in Independence, Ohio, on June 12, 2014. (AP/Tony Dejak)

Associated Press

By one big economic measure, things in the U.S. were never so good as in the early months of 2000. In those heady days, an all-time high of working-age Americans had jobs.

Since then, the rate of labor participation has slid steadily, from a peak of 67.3% to 62.8% last month, scraping lows not seen since the late 1970s.

So is there any chance of reversing the slide?

The White House thinks so, though hesitantly. Other economists agree. Stemming the outflow of workers is possible, they say, with the right policy prescriptions and a more robust economy. Much harder will be nudging the share of Americans in the workforce back up toward two-thirds.

The White House Council of Economic Advisers dug into one of the abiding mysteries of this grinding post-recession recovery in a meaty report last week: With the unemployment rate going down and more Americans finding jobs, why does the overall rate of Americans who are working continue to fall?

In some ways the findings weren’t all that novel. Around half the fall in labor participation since the end of 2007, when the recession hit, came from the upswing in retirements as baby boomers slip out of the workforce.

Around a sixth of the decline since then, the CEA found, stems from the fact that the unemployment rate—at 6.1% in June—remains a fair bit higher than the norm before the recession.

The remaining share is due to longstanding trends that predate the recession, such as a slow slippage of women in the workforce and the fall off in youth employment. Prime-age males have been slowly disappearing from the workforce since the late 1940s.

Slowing or reversing these various dropout trends isn’t easy.

White House and other economists agree that a wholesale immigration overhaul would deliver the biggest single boost to the workforce: adding as many as six million people over a decade, according to the Congressional Budget Office.

Next on many lists, including that of some conservatives, would be an expansion of the Earned Income Tax Credit to include working adults who don’t have children.

“Immigration is the truly powerful force,” says Doug Holtz-Eakin, a conservative economist and former CBO director who argues that other steps, like a comprehensive tax overhaul, could give the economy a sizable jolt.

Jared Bernstein, a former Obama White House economic adviser, points to ramped up infrastructure investment and other measures that could accelerate growth.

“There is nothing like the pull of a strong, tight labor market,” Mr. Bernstein says.

One of President Barack Obama’s economic advisers, Betsey Stevenson, made a similar point last week when she told a story of a coffee shop buzzing with talk of people finding jobs.

Her point: Upbeat talk of jobs gets the discouraged to give it another try.

Still, even the White House isn’t too optimistic about turning things around in dramatic ways. Even its rosiest scenario has the labor participation rate bumping up a bit by 2016 before heading south again for the foreseeable future.

About Washington Wire

Washington Wire is one of the oldest standing features in American journalism. Since the Wire launched on Sept. 20, 1940, the Journal has offered readers an informal look at the capital. Now online, the Wire provides a succession of glimpses at what’s happening behind hot stories and warnings of what to watch for in the days ahead. The Wire is led by Reid J. Epstein, with contributions from the rest of the bureau. Washington Wire now also includes Think Tank, our home for outside analysis from policy and political thinkers.